China to launch commercial pension program next year with aim of attracting more people to private system
- The pilot program will allow all Chinese people aged above 18 years old to enrol and will start on January 1
- PICC Pension, China Life Pension, Taiping Pension Company, Guomin Pension are the insurers chosen to provide products and services
China will launch its commercial pension pilot program early next year, with the aim of attracting more people to participate in the private system that Beijing is building out for its ageing population of 1.4 billion people.
China will start the initiative on January 1 next year for an initial one-year period, according to a statement by the China Banking and Insurance Regulatory Commission (CBIRC) on Thursday.
Insurers PICC Pension, China Life Pension, Taiping Pension Company under China Taiping Insurance, Guomin Pension are the insurers will offer the products and services in 10 provinces and cities – including Beijing and Shanghai cities, as well as the provinces of Jiangsu, Zhejiang, Fujian, Shandong, Henan, Guangdong, Sichuan and Shaanxi.
The initiative is a new segment of the third-pillar private pension scheme under development by Beijing, which is aimed at tackling the needs of an increasingly ageing population and offers a US$1.5 trillion opportunity for financial institutions ranging from banks, insurers, to funds and advisers.
“[It is aimed at] developing commercial pension finance, innovation in services and products that can meet people’s diversified retirement demands, and can provide more secure, mature and stable financial products with standard [investment] targets to ensure long-term value,” the China Banking and Insurance Regulatory Commission (CBIRC) said in a separate statement.
The insurers will help clients create accounts, plan for retirement, manage funds in the accounts and manage risks, it said. The CBIRC will evaluate the performance of the pilot program and enhance regulation to promote a better pension experience in future.